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Grow the ranks: fewer candidates are becoming certified--help turn the tide.

While the number of students earning bachelor's degrees in accounting is rising, it's taking longer for them to become certified.


In fact, nationally, the number of candidates sitting for the CPA Exam has plunged from about 82,000 in 2003 to only 52,000 in 2004 (the first year of the computerized exam), according to a report from exam administrators AICPA, Prometric and NASBA.

According to the report, the top reason candidates gave for not taking the exam is that they lack the time to prepare.

So, how important is it to your firm that candidates become certified? That question was put to employers and candidates in a recent AICPA survey--and the results were staggering.

When asked, "How important is it to your firm that young employees take the CPA Exam and get certified?," 90 percent of employers said it is "very important," with the other 10 percent saying it's "somewhat important."

But in an alarming contrast, when young employees were asked "How important do you think it is to your firm that you pass the CPA Exam and get certified?" only 47 percent said "very important," with 30 percent saying "somewhat important."

So, what can firms do to bridge this gap and encourage licensure of their young staff?


It all starts with your firm's culture: communicate the message that becoming a CPA as soon as possible is a core value of your firm. The following are solutions used by numerous major CPA firms to help back up your firm's message.

Incentives -- Entice candidates to get licensed by offering faster advancement after successful exam completion, along with reimbursement for registration, review courses and study materials, or even pay bonuses for passing the exam to cover some of these costs.

Tracking System -- Institute a system to follow employee progress in preparing for, registering and taking the exam. The system can be used as part of an employee's annual review.

Window Policy -- Establish a window of time during which new employees are expected to take the exam.

Vacation Study Time -- Be flexible when employees request vacation time to study, set parameters for employees to study on the job, especially during the off-season, or offer free vacation hours for the day the exam is taken.

Communication -- Communicate your firm's CPA Exam policy to potential hires as a recruiting tool and to new hires through your firm's employee handbook. Also, educate your human resource staff on its role in encouraging employees to make becoming a CPA their top priority.


The two most important goals for candidates to become CPAs are passing the Uniform CPA Exam and meeting licensing requirements.

The computerized CPA Exam is a four-part test given one section at a time. Unlike the old pencil and paper exam, it can be taken at virtually any time during the year.

The California Board of Accountancy has outlined two pathways for earning a CPA license. Once a candidate passes the exam and applies for a CPA license, they'll need to select one of the pathways:

Pathway 1 -- Designed for those who will practice only in California and requires:

* A bachelor's degree;

* 24 semester units in accounting-related subjects;

* 24 semester units in business-related subjects (accounting courses beyond the 24 required units may apply toward the business units);

* Passing the Uniform CPA Exam;

* Two years of general accounting experience in public practice, private industry or government supervised by an actively licensed CPA; and

* Passing an ethics course.

Pathway 2 -- Pathway 2 is similar to the licensing requirements of many other states. Therefore, if CPAs are licensed under this pathway, the majority of other states will recognize your license, providing ease of practice. It requires:

* A bachelor's degree;

* 24 semester units in accounting-related subjects;

* 24 semester units in business-related subjects;

* 150 semester units (or 225 quarter units) of education;

* Passing the Uniform CPA Exam;

* One year of general accounting experience supervised by an actively licensed CPA; and

* Passing an ethics course.

Auditing -- While neither pathway requires audit experience, all publicly held companies in the United States, many government agencies and private companies need to be audited each year to remain in business. Therefore, some candidates may want to log the 500 hours of attest or auditing experience to obtain the authority to sign attest reports.


General Accounting Experience -- Since audit hours are no longer required, CPA candidates can acquire the experience needed for licensing from any actively licensed CPA in California.

General experience may include providing any type of service or advice involving the use of accounting, attest, compilation, management advisory, financial advisory, tax or consulting skills, provided it's performed in accordance with applicable professional standards. Experience from more than one employer can be used to qualify a candidate.

For general experience, one CPA supervisor is required to sign, plus one non-licensee, unless the CPA is an owner, partner or shareholder.

Attest Experience -- For attest experience, two CPAs are required to sign, unless one signor is an owner, partner, sole proprietor or shareholder. Otherwise, the first signature on the form is the supervisor's, and the second is someone higher in the firm, company or agency.

Applicable attest experience includes a combination of financial, compliance, operational and management audits, and, in some circumstances, review services. The experience must enable the applicant to demonstrate an understanding of the requirements of planning and conducting an audit with minimum supervision, resulting in an opinion on full disclosure financial statements.

Attest experience can be obtained in public practice, industry or government, and must be performed under the supervision of an actively licensed CPA who is attest-qualified.

For both attest and general experience, the CPA signing off on the form must submit it to the CBA. Failure to do so may result in disciplinary action. The four experience forms are attest experience nonpublic; attest experience public; general experience nonpublic; and general experience public.

For more information, visit

RELATED ARTICLE: Need More Licensing or Exam Information?

For questions about the exam, contact the California Board of Accountancy at (916) 561-1703 or For questions about licensing requirements, you can contact the CBA at (916) 561-1701 or

CalCPA also can help answer your licensing questions at (800) 922-5272 or for licensing FAQs, visit Additionally, CalCPA's Business and Industry Committee hosted a webcast on licensing that included a PowerPoint presentation, which can be downloaded from

The AICPA's PCPS Firm Practice Center has resources for firms looking to encourage their candidate staff members. You can download a tracking system template, find information on exam windows, view sample CPA Exam policy documents and download a sign, "The Top Ten Reason for Taking the CPA Exam," to display in your firm,
COPYRIGHT 2006 California Society of Certified Public Accountants
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Publication:California CPA
Geographic Code:1USA
Date:May 1, 2006
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